Annual percentage rate, Clark Howard, Credit card, Credit card debt, Credit score, Savings account, Tips, Tips and tricks
Having learned the History of Money and the Basics, let me offer some tips and tricks I hope you can make good use of:
- A simple and easy tip for U.S. residents from Consumer Warrior and Financial Expert Clark Howard is to visit www.missingmoney.com to find out if there is any money out there in your name waiting to be collected. I once found a paycheck in my name that was never cashed just by following this simple advice.
- Pay off your credit card debts. Collect information on your credit cards. Which cards are costing you the most every month in terms of interest? List them in that order and concentrate on paying one off. Every month going forward, pay the minimum on all cards except for the one at the top of the list, which you will be contributing all the extra cash that would have gone to the rest of the cards. Discipline yourself until this card is paid off. Once that is done, the extra cash that is freed up is then added on to pay off the next card on the list. Do not relent on this! You will be amazed at the momentum you’ve built and it will speed up your way to freedom!
- Once every six months, call up your credit cards and ask 1) If they can raise your credit limits without you having to go through a credit check and 2) If they can lower your Annual Percentage Rates so that you could have an easier time using their card more often (which you really aren’t, but this gives them incentive to comply with your request.) Raising your limit will give you better creditworthiness and make it easier to lower your rates with the other cards. This has saved me a lot of money in the long run and has brought me closer to my goals.
- Once you have paid off a card, do not cancel it. If you use it, pay off the debt as soon as possible. If it has an annual fee, ask if it can be waived (at least for this year.) Just make sure that once every six months, you use the card for something, otherwise, the card will automatically be closed due to inactivity.
- If you have direct deposit through your employer, try to set it up so that a certain amount per paycheck goes into your regular bank account that you use for paying for bills and the rest into a savings account. I remember when I was just starting out during my first job in Michigan as a troubleshooter for a big company, I arranged to have $1000 per paycheck sent to my checking account which I used for paying for daily expenses. Anything I made through overtime or other means that went over that amount automatically got deposited to my savings account which I then forgot about. It’s a nice surprise that on a rainy day, I have emergency funds available.
- Eliminate bills and expenses that you can live without. Downgrade where ever you can. I mean, do you really need 1000 channels? As the say, less is more… for you!
- Be diplomatic and polite. You’ll be happy with the results. Not too long ago, I was remodeling my condo to have an Arabian Nights theme. I didn’t want to spend a whole lot on it, so I started browsing online to find complimentary things to add to the theme. I found two people selling a circular, fairly new Moroccan bed that went well with what I had in mind. I wrote a simple, yet polite letter to both owners asking if they would be willing to offer the beds at a lower price. I sent them a link of each other’s ads. One was adamant about her price, while the other was more receptive and lowered the cost. I got a great deal just by having a good, respectful attitude. And in the end, I get a good night’s sleep in a kick ass bed.
I hope you gained something out of this post. Please send me any feedback or questions you may have. Next time, I’ll be talking about the different types of assets and why you should have at least one of each!
I owe Discover card $13,000 and have recently come into some cash. Should or can I offer to settle with them for less? I have very good credit and don’t want to jeopardize that but on the other hand I have owed the same $13,000 for a couple of years and have tried to get them to lower my interest rate and they won’t!!
Summer Chaser said:
Hi Nancy, as a disclaimer, I am not a professional and have no particular insight into your specific situation. Having said that, the first thing I would recommend to anyone is to get out of credit card debt as soon as possible. The only exception in your case is if you can use your cash for generating cashflow larger than what your credit cards charge you in interest.
Summer Chaser said:
Oh and as for trying to settle with them for less, from what I understand, your credit may be affected if you do. Personally, I woundn’t go that route, but if you can take the hit then ask yourself if it’s worth the cash you save from settling.
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